Chapter 7 test

question

What is an explicit cost?

answer

A payment for resources not owned by the firm

question

When marginal product is rising, what happens to marginal cost?

answer

Marginal cost is falling

question

When marginal product is falling, what happens to marginal cost?

answer

Marginal cost is rising

question

In comparing the change between total cost and total variable cost associated with an additional unit of output, we find that:

answer

Both are equal to marginal cost

question

If in the short run a firm's total product is increasing, then its:

answer

Marginal product could either be increasing or decreasing

question

If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point?

answer

Divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs in the long run

question

A local bakery hires two additional bakers. What kind of adjustment is this?

answer

Short-run

question

As output increases, total variable costs:

answer

Increases at a decreasing rate and then at an increasing rate

question

Monopolistic competition

answer

Arises where many firms are competing in a market to sell similar but differentiated products

question

Other things equal, if the prices of a firm's variable inputs were to fall:

answer

Marginal cost, average variable cost, and average total cost would all fall

question

In the short run, it is impossible for an expansion of output to cause an increase in:

answer

average fixed costs

question

The law of diminishing marginal returns describes the:

answer

Relationship between resource inputs and product outputs in the short run

question

What statement concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?

answer

AP continues to rise so long as TP is rising

question

Other things equal, if the wage Raes paid to a firm's labor inputs were to rise, we would expect the:

answer

AVC, ATC, and MC curves all to rise

question

When diseconomies of scale occur:

answer

The long-run average total cost curve rises.

question

A firm's total variable cost will depend on:

answer

The prices of its variable inputs, the production techniques that are used, the amount of output produced

question

To economists, the main difference between the short run and the long run is that:

answer

In the long run all resources are variable, while in the short run at least one resource is fixed

question

Which of the following is most likely to be a variable cost?
a. Fuel and power payments
b. Interest rates on business loans
c. Rental payments on iBM equipment
d. Real estate taxes

answer

Fuel and power payments

question

If technological advance increases a firm's labor productivity, we would expect its:

answer

Average total cost curve to fall

question

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.

answer

Total revenue

question

When AP is rising AVC is -----, and when AP is falling AVC is -------

answer

When AP is rising AVC is falling, and when AP is falling AVC is rising?

question

What term is used to describe the additional cost of producing one more unit?

answer

Marginal cost

question

If a firm decides to produce no output in the short run, its costs will be:

answer

Fixed costs

question

The 1st, 2nd, and 3rd workers employed by a firm add 24, 18, and 9 units to total product. Therefore the:

answer

Marginal product of the 3rd worker is 9

question

When a firm does more of something, it gets better at it. This learning-by-doing is:
A. a source of diseconomies of scale.
B. a source of economies of scale.
C. called the principle of natural progression.
D. called "spreading the overhead."

answer

A source of economies of scale

question

When average fixed costs are falling

answer

Average variable cost may be either rising or falling

question

How will TVC increase in the short run?

answer

TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate

question

A firm that faces no completion is referred to as a

answer

Monopoly

question

As a firm produces successive units of output in the short run we would expect:

answer

TVC to increase initially by declining amounts, but eventually increase by increasing amounts

question

The transition point between where MC is pulling down and pulling up AC always occurs at the

answer

Minimum point of the AC curve

question

Which of the following is mostly likely t be an implicit cost for Company X?
A). depreciation charges on company-owned equipment
B) rental payments on IBM equipment
C) payments for raw materials purchased from Company Y

answer

Depreciation charges on company-owned equipment

question

in microeconomics, the term ________ is synonymous with economies of scale

answer

Increasing returns to scale

question

A situation where the level of output, scale and average costs are all rising is called:
a. decreasing returns to scale
b. diseconomies of scale
c. diminishing returns to scale
d. both a and b are correct

answer

Both a and b are correct

question

The firm's average fixed costs are:

answer

The vertical distance between AVC and ATC

question

What expresses the law of diminishing marginal returns?

answer

As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital), beyond some point the resulting extra output will decline

question

Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs?

answer

Cost incurred in the act of producing

question

Which of the following falls outside of the classification of business expenditures

answer

Costs of research and developement

question

What would typically be ignored because spending has already been made and cannot change?

answer

Sunk costs

question

The total ouput of a firm will be at a maximum where:

answer

MP is zero

1 of 39

question

What is an explicit cost?

answer

A payment for resources not owned by the firm

question

When marginal product is rising, what happens to marginal cost?

answer

Marginal cost is falling

question

When marginal product is falling, what happens to marginal cost?

answer

Marginal cost is rising

question

In comparing the change between total cost and total variable cost associated with an additional unit of output, we find that:

answer

Both are equal to marginal cost

question

If in the short run a firm's total product is increasing, then its:

answer

Marginal product could either be increasing or decreasing

question

If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point?

answer

Divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs in the long run

question

A local bakery hires two additional bakers. What kind of adjustment is this?

answer

Short-run

question

As output increases, total variable costs:

answer

Increases at a decreasing rate and then at an increasing rate

question

Monopolistic competition

answer

Arises where many firms are competing in a market to sell similar but differentiated products

question

Other things equal, if the prices of a firm's variable inputs were to fall:

answer

Marginal cost, average variable cost, and average total cost would all fall

question

In the short run, it is impossible for an expansion of output to cause an increase in:

answer

average fixed costs

question

The law of diminishing marginal returns describes the:

answer

Relationship between resource inputs and product outputs in the short run

question

What statement concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?

answer

AP continues to rise so long as TP is rising

question

Other things equal, if the wage Raes paid to a firm's labor inputs were to rise, we would expect the:

answer

AVC, ATC, and MC curves all to rise

question

When diseconomies of scale occur:

answer

The long-run average total cost curve rises.

question

A firm's total variable cost will depend on:

answer

The prices of its variable inputs, the production techniques that are used, the amount of output produced

question

To economists, the main difference between the short run and the long run is that:

answer

In the long run all resources are variable, while in the short run at least one resource is fixed

question

Which of the following is most likely to be a variable cost?
a. Fuel and power payments
b. Interest rates on business loans
c. Rental payments on iBM equipment
d. Real estate taxes

answer

Fuel and power payments

question

If technological advance increases a firm's labor productivity, we would expect its:

answer

Average total cost curve to fall

question

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.

answer

Total revenue

question

When AP is rising AVC is -----, and when AP is falling AVC is -------

answer

When AP is rising AVC is falling, and when AP is falling AVC is rising?

question

What term is used to describe the additional cost of producing one more unit?

answer

Marginal cost

question

If a firm decides to produce no output in the short run, its costs will be:

answer

Fixed costs

question

The 1st, 2nd, and 3rd workers employed by a firm add 24, 18, and 9 units to total product. Therefore the:

answer

Marginal product of the 3rd worker is 9

question

answer

A source of economies of scale

question

When average fixed costs are falling

answer

Average variable cost may be either rising or falling

question

How will TVC increase in the short run?

answer

TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate

question

A firm that faces no completion is referred to as a

answer

Monopoly

question

As a firm produces successive units of output in the short run we would expect:

answer

TVC to increase initially by declining amounts, but eventually increase by increasing amounts

question

The transition point between where MC is pulling down and pulling up AC always occurs at the

answer

Minimum point of the AC curve

question

answer

Depreciation charges on company-owned equipment

question

in microeconomics, the term ________ is synonymous with economies of scale

answer

Increasing returns to scale

question

answer

Both a and b are correct

question

The firm's average fixed costs are:

answer

The vertical distance between AVC and ATC

question

What expresses the law of diminishing marginal returns?

answer

As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital), beyond some point the resulting extra output will decline

question

Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs?

answer

Cost incurred in the act of producing

question

Which of the following falls outside of the classification of business expenditures

answer

Costs of research and developement

question

What would typically be ignored because spending has already been made and cannot change?

answer

Sunk costs

question

The total ouput of a firm will be at a maximum where:

answer

MP is zero

Continue to order Get a quote

Chapter 7 test

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee